Indian Prime Minister Narendra Modi announces withdrawal of ₹500 and ₹1000 denomination banknotes effective midnight, making 86% of the currency in circulation invalid.
On 8 November 2016, the Government of India announced the demonetisation of all 500 and 1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new 500 and 2,000 banknotes in exchange for the demonetised banknotes. Prime Minister Narendra Modi claimed that the action would curtail the shadow economy, increase cashless transactions and reduce the use of illicit and counterfeit cash to fund illegal activity and terrorism.The announcement of demonetisation was followed by prolonged cash shortages in the weeks that followed, which created significant disruption throughout the economy. People seeking to exchange their banknotes had to stand in lengthy queues, and several deaths were linked to the rush to exchange cash.According to a 2018 report from the Reserve Bank of India, approximately 99.3% of the demonetised banknotes, or 15.30 lakh crore (15.3 trillion) of the 15.41 lakh crore that had been demonetised, were deposited with the banking system, leading analysts to state that the effort had failed to remove black money from the economy. The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on the day after the announcement. The move reduced the country's industrial production and its GDP growth rate. It is estimated that 1.5 million jobs were lost. The move also saw a significant increase in digital and cashless transactions throughout the country.Initially, the move received support from several bankers as well as from some international commentators. The move was also criticised as poorly planned and unfair, and was met with protests, litigation, and strikes against the government in several places across India. Debates also took place concerning the move in both houses of Parliament.
The prime minister of India is the head of government of the Republic of India. Although the President of India is the constitutional, nominal, or ceremonial head of state, in practice and ordinarily, the executive authority is vested in the Prime Minister and their chosen Council of Ministers. The prime minister is the leader elected by the party with a majority in the lower house of the Indian parliament, the Lok Sabha, which is the main legislative body in the Republic of India. The prime minister and their cabinet are at all times responsible to the Lok Sabha. The prime minister can be a member of the Lok Sabha or of the Rajya Sabha, the upper house of the parliament. The prime minister ranks third in the order of precedence.
The prime minister is appointed by the president of India; however the prime minister has to enjoy the confidence of the majority of Lok Sabha members, who are directly elected every five years, lest the prime minister shall resign.
The prime minister unilaterally controls the selection and dismissal of members of the Council of Minister; and allocation of posts to members within the government. The council, which is collectively responsible to the Lok Sabha as per Article 75(3), assists the President regarding the operations under the latter's powers; however, by the virtue of Article 74 of the Constitution, such 'aid and advice' tendered by the council is binding.
The longest-serving prime minister was Jawaharlal Nehru, also the first prime minister, whose rule lasted 16 years and 286 days. His premiership was followed by Lal Bahadur Shastri's short tenure and Indira Gandhi's 11- and 4-year-long tenures, both politicians belonging to the Indian National Congress. After Gandhi's assassination, her son Rajiv took charge until 1989, when a decade with six unstable governments began. This was followed by the full terms of Atal Bihari Vajpayee, Manmohan Singh, and Narendra Modi. Modi is the 14th and current prime minister of India, serving since 26 May 2014.